From chapel to Church ...

Question: What links teen singer Charlotte Church, screenwriter Russell T Davies and a Dalek? Answer: Welshness - and, in particular, the new mood of confidence that is sweeping the Valleys. 'Every day when I wake up, I thank the Lord I'm Welsh,' sang Catatonia's Cerys Matthews in 1998. Now, suddenly, everyone else seems to be singing it too.

Church, Davies and the Dalek were all at the launch last week of the reborn Doctor Who , which is being produced by BBC Wales with a budget of almost £1 million an episode. The party was held at the swanky St David's Hotel in Cardiff Bay, which has had a rebirth just as dramatic as that of the Doctor. Cardiff's 19th-century docks have, in the space of a decade, become a prime piece of 21st-century Euro-waterfront.

'There has been so much development in Cardiff in the past decade, especially the docks,' said Peter Murrell, assistant editor of the Western Mail . 'Now there is the Wales Millennium Centre and the national assembly building, which will be completed by the end of the year. Cardiff has developed from a parochial town into a very confident place which sees itself as a national capital.'

Wales is used to being patronised - or worse. 'The Welsh have never made any significant contribution to any branch of knowledge, culture or entertainment,' said the writer AN Wilson in 1993. 'They have no architecture, no gastronomic tradition, no literature worthy of the name.'

Critic AA Gill dubbed Rhyl 'a town only a man driving a crane with a demolition ball would visit with a smile'. Anne Robinson called the Welsh 'irritating and annoying' and asked 'what are they for?'

In the past week, the Welsh have provided the perfect answer to Robinson's question. There was Charlotte Church draped over a Dalek, coolly telling showbiz reporters about her doomed affair with ex-boyfriend Kyle Johnson: 'He rang me up crying after we split and I was like, "Whatever".'

Welshman Howard Stringer has become the first non-Japanese chairman and chief executive of Sony; Bryn Terfel has wowed Covent Garden as Wotan in Die Walküre ; the Welsh band the Stereophonics have the number one single with 'Dakota'; and then there's the rugby. Today 40,000 leek-wielding Welsh supporters head to Murrayfield convinced that Wales are on course for the grand slam.

Rhodri Morgan, the Welsh First Minister, can barely contain his excitement. 'The Welsh rugby team against France put up the best defensive rearguard action since Rorke's Drift,' he said. 'It's done a tremendous amount for self-confidence. People are beginning to feel taller, prouder, more confident.'

'There is an upbeat nationalist - with a small "n" - feeling about Wales,' said Murrell. 'A confident patriotism, especially with the success of the rugby team. There have been so many false dawns since the great rugby team of the Seventies, but this time we believe it's the real thing.'

The Welsh take rugby very seriously. When they beat England at Cardiff last month, one fan in Caerphilly was so overcome by the victory after a decade of drubbings that he cut off his testicles. If, as their fans confidently expect, Wales pull off the grand slam by beating Scotland today and Ireland next week, one fears for the consequences.

Rugby has always been a metaphor for the state of the Welsh nation. When Wales was enjoying the fruits of the Wilson-era boom in the 1960s and early 70s, they were the best team in the world. Their fans were the best singers, too, filling the rugby cathedral that was Cardiff Arms Park with glorious songs - Bread of Heaven, Sospan Fach, Land of My Fathers. Beating England at rugby was a way of making up for centuries of cultural oppression: Phil Bennett was a direct descendant of 15th-century rebel leader Owain Glyndwr, but with a more elusive sidestep.

The new hero is Gavin Henson, 23, swarthily handsome, absurdly self-confident and, best of all, said to be romantically attached to Charlotte Church. 'We see Gavin Henson as much more exciting than David Beckham,' explained Murrell. 'If the stories are true about his dream relationship with Charlotte, it's a Welsh royal family to match anything from "Beckingham Palace".'

Henson is an icon unlike any ever to grace a Welsh rugby pitch. He gels his hair, shaves his legs and wears gold boots. Twenty years ago, when post-match celebrations meant drinking a skinful of beers and probably a bottle of aftershave, too, he would have been mocked. Now he is lionised - the first metrosexual rugby star.

The current successes in the Six Nations are being celebrated with such abandon because the past 20 years have been so dire. Again, fortunes on the pitch mirrored social changes - both the rugby team and Welsh society were in meltdown. The pits closed, the steel industry declined, once prosperous towns became workless crime factories.

For more than a century, the most populous parts of Wales had defined themselves through heavy industry: monolithic working-class communities - male, macho, cohesive. Richard Llewellyn's How Green Was My Valley may be a highly sentimentalised portrait of a Welsh mining community, yet it did capture something of the spirit of a confident working-class society that was swept away in the Eighties.

Morgan insists that the crisis has now passed: job creation is running at double the UK average; and unemployment, once 30 per cent above the national average, is now 10 per cent below it. 'It's now worth asking the question,' he said, "Is Wales on a roll?"'

Others are less sure, arguing that the waves from Cardiff docks have yet to reach depressed former industrial areas. 'We've learnt to walk, we're running, but we're not yet flying,' said Smith. 'The health service worries people more than the fate of Charlotte Church and whether she's in the arms of Gavin Henson.'

Wales really is two countries: the English-speaking masses in South Wales and Welsh-speaking enclaves in the north-west and south-west. Welsh-speaking Wales is more rural, more dependent on farming and didn't suffer the same identity crisis as the urban, industrial south. Its linguistic badge - strengthened by the introduction of Welsh-language station S4C in 1982 and by the growth of a bilingual media and bureaucracy in Cardiff - gave it definition, a point of difference from its neighbour to the east.

The Welsh language has thrived in the past 15 years. The proportion of Welsh speakers has risen, especially among the young - 25 per cent of under-35s and 38 per cent of three- to 15-year-olds can now speak Welsh, and advocates of the language dream of a bilingual Wales. Welsh film-making is buoyant. The unequivocally Welsh-speaking Bryn Terfel is the world's greatest bass-baritone. Welsh-language Wales used to be represented by the bardic absurdities of the Eisteddfod; now it is cutting-edge.

English-language Wales was slower to find its voice, but in the late Nineties a remarkable number of high-profile bands emerged in the south, including the Manic Street Preachers, the Stereophonics and Super Furry Animals. In many cases born out of raw protest at the bankruptcy, physical and spiritual, of South Wales, they began to redefine English-language Wales. It was no longer macho, middle-aged, welfare-driven, but young, sharp, dangerous - too dangerous in the case of the Manics' Richey Edwards.

At one point Newport, whose town-centre clubs hosted many of the debut gigs of these bands, was being likened to Seattle - Newport, which used to promote itself as 'the home of the mole wrench'. It may be significant that the town's most successful current band is Goldie Lookin' Chain, a cod rap act with a self-mocking confidence. Chav art.

'There has been a huge cultural change since the decline of the mining industry,' said Murrell. 'That was the image of Wales for so long, but since the 1984 strike there has been a readjustment. During the strike, women took a more prominent role and that has continued to the present day.' After-shave is now strictly for wearing, not for drinking.

Today the best-known Welshman in Britain - certainly in Little Britain - is Dafydd Thomas, the only gay in the village of Llanddewi Brefi. Dafydd Thomas is as perfect a representative of the new Welshness as Henson with his shaved legs and Church with her angelic voice and less angelic love of partying. Wales used to be strictly chapel, now it is definitely Church - confident, self-indulgent, unbuttoned. Charlotte once remarked: 'I don't need it [money], so what's the point? I might as well leave it where it is. I'm a proper home girl and I love being Welsh and living in Cardiff.'

'I'd never been to Wales before I took this job,' said Judith Isherwood, the Australian who is chief executive of the Wales Millennium Centre. 'I suppose I'd thought of Wales as a county. Now I realise it's a distinct country and thinks of itself in a completely different way. The Welsh are looking to the world, rather than to England. I'm aware of the stereotypes that exist - religion, poverty in the Valleys - but they're outdated.'

'Wherever you scratch Wales in 2005, it no longer looks like Wales in 1905, or 1955, or even 1985,' said Dai Smith. 'In 1985, I could have shown you things that stretched all the way back.' Now Shirley Bassey has found a new gay audience and even Tom Jones has reinvented himself and grown a nifty goatee. Wales is hip, AN Wilson has been repulsed and Llanddewi Brefi is so famous that the village sign keeps being stolen. What on earth would Nye Bevan make of it?

Highs

1400: Owain Glyndwr wages a nine-year campaign for Welsh freedom from English rule. In 1409 he surrendered Harlech Castle and is believed to have finished his life in obscurity. His vision of an independent Wales lives on.

1797: The Welsh save Britain from Napoleon's clutches by repelling the French invasion of Fishguard. 'Jemima Fawr' (Jemima the Great) captures 12 of the invading soldiers.

1999: Opening of the Millennium Stadium in Cardiff, the world's largest stadium with a retractable roof. It proves humiliating for the English, who play the FA Cup final there, and whose rugby team are defeated in 2005.